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Which payment platform: PayPal v Stripe?

March 28, 2018

by

Ronan

E-Commerce

For many small businesses who are looking to sell their products online, one of the questions they must ask before launching their online store, is which online payment processors should they use? I will be comparing the two most popular payment processors, Paypal and Stripe. Although these are the two most used payment processors,  Paypal have a much larger market share obtaining 64%, with Stripe only possessing 18% of the market.

I’m going to compare both processors, using the below three factors:

1. Transaction and service fees

Stripe charge you a flat rate of 2.9% + 30¢ per successful charge for non - European credit cards as long as you're doing under $1 million in volume per year. This rate varies country to country, but it's always flat. They don't disclose any special high volume rates. Thankfully for Irish customers, they also offer a very attractive 1.4% + €0.25 per transaction on European credit cards on their pay as you go plan.

The base fee for PayPal is the same as Stripe, 2.9% + 30¢ for non European credit cards, but PayPal has several additional service fees that make things a little more complicated such as monthly charge for using PayPal, additional charge for paying with American Express, international cards and also micropayments (less than $10).

Thus, PayPal fees are far more complex and Stripe is the cheaper option and in almost all cases.

One benefit of Paypal over Stripe is that PayPal usually pays out within 1 business day. Stripe has rolling 7 day transfers in most other countries such as Ireland.

2. Customer Service

I have only had minimal dealings with PayPal's customer support but I have found Paypal’s email support quite slow and it was quite difficult to get someone on the phone. It also has a poor customer service rating on Trust Pilot.

Stripe has open channels for their email support, and they also have an IRC channel where designers and developers can chat and get live help from real engineers. This can prove vital if you're working through a tough problem and need some live help. Unfortunately Stripe doesn't yet have phone support, but this is said to be in their project roadmap. Stripe is still relatively new and in order for them to build significant market share, providing great customer service could help give them a competitive edge over Paypal but we will see over time.

3. Security

Both Stripe and PayPal take safety very seriously. They're both very stable and secure platforms which I have full faith in using for processing payments.

Stripe.js helps ensure very high site safety. When you use Stripe.js on your website, the credit card data entered into your payment form is never sent to your server. Instead, the data is sent directly to Stripe.

This allows your business to be automatically PCI compliant because you don't handle any sensitive credit card data on your servers. Transactions are more secure because a breach of your servers won't result in any stolen credit card data.

PayPal now has a way to store cards in a vault, but it isn't quite the same as Stripe.js. The sensitive card data still has to go through your server first, and this puts a security burden on the software developer or the customer. They've recently taken steps to provide better options, but these options still aren't as secure as Stripe.js.

Overall, we prefer to use Stripe over Paypal as it not only provides more cost effective fees but their customer support and security setup has some competitive advantages over Paypal.

We hope you have found this article useful and thanks very much for reading.

Which payment platform: PayPal v Stripe?

March 28, 2018

by

Ronan

E-Commerce

For many small businesses who are looking to sell their products online, one of the questions they must ask before launching their online store, is which online payment processors should they use? I will be comparing the two most popular payment processors, Paypal and Stripe. Although these are the two most used payment processors,  Paypal have a much larger market share obtaining 64%, with Stripe only possessing 18% of the market.

I’m going to compare both processors, using the below three factors:

1. Transaction and service fees

Stripe charge you a flat rate of 2.9% + 30¢ per successful charge for non - European credit cards as long as you're doing under $1 million in volume per year. This rate varies country to country, but it's always flat. They don't disclose any special high volume rates. Thankfully for Irish customers, they also offer a very attractive 1.4% + €0.25 per transaction on European credit cards on their pay as you go plan.

The base fee for PayPal is the same as Stripe, 2.9% + 30¢ for non European credit cards, but PayPal has several additional service fees that make things a little more complicated such as monthly charge for using PayPal, additional charge for paying with American Express, international cards and also micropayments (less than $10).

Thus, PayPal fees are far more complex and Stripe is the cheaper option and in almost all cases.

One benefit of Paypal over Stripe is that PayPal usually pays out within 1 business day. Stripe has rolling 7 day transfers in most other countries such as Ireland.

2. Customer Service

I have only had minimal dealings with PayPal's customer support but I have found Paypal’s email support quite slow and it was quite difficult to get someone on the phone. It also has a poor customer service rating on Trust Pilot.

Stripe has open channels for their email support, and they also have an IRC channel where designers and developers can chat and get live help from real engineers. This can prove vital if you're working through a tough problem and need some live help. Unfortunately Stripe doesn't yet have phone support, but this is said to be in their project roadmap. Stripe is still relatively new and in order for them to build significant market share, providing great customer service could help give them a competitive edge over Paypal but we will see over time.

3. Security

Both Stripe and PayPal take safety very seriously. They're both very stable and secure platforms which I have full faith in using for processing payments.

Stripe.js helps ensure very high site safety. When you use Stripe.js on your website, the credit card data entered into your payment form is never sent to your server. Instead, the data is sent directly to Stripe.

This allows your business to be automatically PCI compliant because you don't handle any sensitive credit card data on your servers. Transactions are more secure because a breach of your servers won't result in any stolen credit card data.

PayPal now has a way to store cards in a vault, but it isn't quite the same as Stripe.js. The sensitive card data still has to go through your server first, and this puts a security burden on the software developer or the customer. They've recently taken steps to provide better options, but these options still aren't as secure as Stripe.js.

Overall, we prefer to use Stripe over Paypal as it not only provides more cost effective fees but their customer support and security setup has some competitive advantages over Paypal.

We hope you have found this article useful and thanks very much for reading.

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